Apple forced to adopt new refund policy under Australian consumer law

Apple has been lying to consumers about its obligation to replace or repair faulty computers, iPhones, iPads and iPods, but has now promised to retrain staff and reassess claims stretching back two years following action by the competition watchdog.

Apple misled consumers into thinking they were entitled to less recourse than the new Australian consumer law prescribes, the Australian Competition and Consumer Commission (ACCC) found.

Apple and its suppliers told Australian consumers they were only entitled to what Apple wanted to offer them when products failed, rather than what they should have been entitled to under Australia's new consumer laws.

"The ACCC was concerned that Apple was applying its own warranties and refund policies effectively to the exclusion of the consumer guarantees contained in the Australian Consumer Law," ACCC chairman Rod Sims said.

"This undertaking serves as an important reminder to businesses that while voluntary or express warranties can provide services in addition to the consumer guarantee rights of the ACL, they cannot replace or remove those ACL guarantee rights."

Mr Sims added that consumer guarantees did not have a time limit, but applied for as long as "reasonable to expect given the cost and quality of the item".

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The competition watchdog could take Apple to court if it failed to follow the undertaking.

A spokeswoman for Apple said it was "dedicated to making the best products in the world and delivering unmatched customer service everywhere we do business".

"In Australia, we have been working closely with the ACCC to make sure our customers understand their local consumer rights and receive the industry leading customer service they expect."

As part of the undertaking, Apple has promised to reassess all claims about faulty products purchased over the past two years and provide consumers with what they should be legally entitled to. The undertaking takes effect on January 6 and Apple will assess old claims for the next 90 days.

According to the undertaking, Apple would soon publish on its website a note stating: "If you believe that you have been denied a statutory right or remedy by Apple in the past in relation to a product sold to you by Apple or did not pursue a warranty claim because of representations made to you by Apple, please contact Apple ... and your claim will be assessed."

The ACCC found Apple and its suppliers told customers it did not have to provide a refund, repair or replace products with a "major failure", when in fact consumers should have been allowed to choose either a refund or replacement. And that consumers should have been entitled to free repairs, refunds or replacements for products with minor faults.

The ACCC told Apple it was in breach of Australia's consumer guarantees when it told consumers they were only entitled to a full refund if goods were returned within two weeks; that it would only provide a refund or replacement if products were damaged within a year of purchase; that it was not responsible for non-Apple products sold through Apple stores; and when it only offered a store credit rather than a full refund for faulty products.

Apple has promised to retrain staff and resellers over two years and provide consumers with more information about their rights under Australian consumer laws.

In particular, it would keep a consumer rights page on its website for two years starting January 6 and stock ACCC brochures about consumer rights in all stores.